Here are the latest quarterly figures from Mortgage for Business, abridged and in headline form :-

• 422 buy-to-let mortgage products on the market
• 25 lenders in the sector
• Average yields 6.1% per annum
• Average loan to value for semi-commercial property 62%.

All in all buy-to-let, subject to the risks associated with capital values and in getting the wrong tenants in place, remains one of the most robust investments in the low interest rate environment which is likely to enure for the forseeable future.

As many readers will know, in a sign of the times and perhaps long overdue, the self certification mortgage market will be regulated in the near future. It is unfortunate that such tight regulation is needed but the huge excesses and fraud of the last decade have made this inevitable.

With lenders adopting stringent criteria in any event, is it specifically necessary for the buy to let market to be regulated, bearing in mind that some landlords own multiple properties and have been or remain highly leveraged ? What form should such regulation take if it does happen ?

In a recent survey by Move with Us, estate agents, not exactly known for being in favour of any regulation which might fetter a sale in any way, were asked whether they consider that the buy to let market ought to be regulated. Interestingly, over 50% were in favour of regulation, which indicates that even estate agents are now adopting a far more measured approach to the property market and see clearly that an ongoing boom and bust cycle, especially when the bust part is so severe, is no longer sustainable.

We are unaware of any plans to specifically regulate buy to let or as to what form any regulation might take. If you have any views on this issue, please do let us know.

Wherever there’s a bear market, there’s generally a corresponding bull market somewhere.

The sales market for residential properties is and has been in the doldrums, and in our view, due to both macro, micro and sector specific reasons, we don’t see this changing for the foreseeable future.

The increased and increasing number of people who can’t afford to buy a residential property means that those people generally end up renting.

Put into some hard facts, a report from Paragon Group states that :-

• Over 17 % of housing stock in Britain is now being privately rented
• The above percentage has been increasing fast – it represents an extra 1.8 million rental properties on the market during the last decade

Maybe this increase in demand will have a knock on effect on the sales market, with more buy-to-let investors buying and more importantly more buy-to-let mortgages available.

Buy-to-let lenders, like lenders and banks generally, seem to us to be continuing with ill-thought out actions. The excesses of the last decade seem to be being matched by excess caution in this decade.

As an example, just at a time when the buy-to-let market is looking more attractive, The Mortgage Works are pulling out of the limited company buy-to-let market. While there are obvious risks in lending to limited companies, with the right safeguards, such as loan-to-value restrictions, the possibility of some personal guarantee element or a raft of other possibilities and combinations, lenders are quite capable of adequately protecting their interests. It is also in lenders interest generally to help to boost volumes of sales and stimulate some interest and possibly growth in the sales market, as otherwise the problem of falling prices, demand and possible losses for lenders becomes self perpetuating.

It’s all doom and gloom out there isn’t it ? Good news, either on a local, national or international level is thin on the ground at the moment. But there is always some good news somewhere, however small scale.

Today’s good news relates to first time buyers. The number of towns in the UK where first-time buyers can afford to buy a home is now at its highest for 8 years, according to the Halifax First Time Buyer Review.  The average price paid by a first-time buyer has reduced by just over 4% and now stands at just over £135,000.00. Put in a more understandable context, this equates apparently to affordability for first time buyers in around half the local authority designations, a big rise from the 6% figure in 2007.

There is a big divide between the North of England and South of England. The affordability in the North is at around 80% whereas in the South it may be less than 10%.

Research by Law of Property Act Receivers Templeton suggests that whilst the buy-to-let market seems to be giving a minor renaissance, Landlords should be very cautious and realistic. The headline figures from the research are :-

• Nearly 8,700 more tenants are over2 months in arrears
• There are over 29,000 buy-to-let mortgages in severe arrears compared to 3 years ago.
• In the second quarter of this year, there were nearly 75,000 tenants in England and Wales in severe arrears

The OFT case involving Foxtons generated plenty of publicity several years ago, but it remains unclear whether much has changed in the area of letting agents fee reasonableness.

Some may recall that the outcome of the case was perhaps a little unsatisfactory. The court found that in principle letting agents can charge renewal fees, even at what appear to be extortionate rates, but must make this clear to their landlord clients at the time the contract is entered into.

The OFT seem to have their doubts that this is happening as they have advised this last week that they are reminding agents of their obligations via trade associations and such like. It appears that the problem has not gone away, and in economic conditions where estate agents have become ever more reliant on letting management income due to the inertia in sales, it is tempting to seek to maximize the renewals, effectively for doing nothing. So, if you are a landlord, be cautious, your letting agent may have done a great job finding tenants but always read the terms and conditions and particularly ongoing charges which may be triggered simply from a maintenance of the status quo.